Finding Lively Stories in Boring Budgets

Budgets are dull. Priorities are interesting and important. The boring budget of the agency you cover hides interesting and important stories if you are persistent and creative enough to find them. Spending reports as the budget is carried out also yield interesting and important stories.

Studying the budget

• Who wins? Who loses?
  Think of your budget as a box score. Sports writers find interesting stories all the time by telling who wins and who loses. Each budget reflects victories and defeats for various interests in your community. Tell how they won or lost and what that outcome means.
• Focus on meaning, not numbers.
  Dave Herzog of the Providence Journal notes: "Remember that (the budget) is a document that charts your town's plan for the coming year and reflects the political values of the people who put it together."
• Fact vs. fiction.
  Budgets are plans. Some plans don't work out. Check last year's budget against the actual spending. Did someone fail to plan well? Did someone who lost in budgeting win anyway by just spending the money or by having more clout with the executive than with the budgeting authority? Check this year's budget against last year's actual spending. Does it reflect poor planning or wishful thinking? Does it omit some obvious expenses that are likely to repeat?
• Analyze the budget.
  Get the budget and all financial reports in electronic form. Get budgets and financial reports for previous years. Use a spreadsheet to spot trends. Where is spending growing? Where is in shrinking? When using figures over several years, be sure to adjust for inflation. As Herzog advises, "This will save you from making the embarrassing mistake of writing that spending has doubled in your town. "
• Know the process.
  Do departments or agencies justify every dollar they spend or just their increases over last year? Or just their increases beyond inflation? Who proposes? Who approves? What's the public's role? If the agency holds public hearings, you should concentrate your reporting in advance of the hearings, so readers have a chance to act on the information. Don't check just the budget that the executive submits to the legislative body, but check the budget requests from departments. Is the executive adding items that the departments didn't even request? What is cut from the departments' requests? John Rains of the Fayetteville Observer gives these reminders: "Agencies ask for more than they expect to get" and "Agencies have few incentives to save taxpayers' money."
• Be wary of predictions.
  Again from Rains: "Remember, agencies tend to exaggerate their need for money and the consequences of not getting as much as they want." Jim Flansburg, formerly of the Des Moines Register, said governments practiced "firemen first" budgeting, meaning the first cuts threatened are in the services voters (readers) see as most important, in order to win support for tax increases. Don't believe anyone's predictions. Seek the real answers to where budgets would be cut or where they could be cut.
• Focus on impact, not process.
  Budgets are important because they affect people. Get into the classrooms, neighborhoods and parks where readers will feel the impact of budget cuts or increases. Tell how the new priorities will affect people's lives. Passing the budget is not a big story. Deciding which streets to repair or what programs to cut at a school is a big story. As Rains says: "Budget hearings and budget documents are starting points, not ending points, for stories. Look beyond the numbers for stories on how real people, agency employees as well as members of the public, are affected by public spending."
• Crack the code.
  Understand the coding used in the budget. Lisa Getter of the Miami Herald recounts: "In a project I did on Florida's budget, for instance, I learned that line items added by legislators were marked by alphabetical letters."
• What's changing?
  How is the agency meeting new priorities? Your community's needs are changing. Identify factors that will push new spending, such as annexation, immigration and post-9/11 security. Does a costly murder trial threaten the budget of a small county? Did a lawsuit force a change in spending? Has a once-expensive need declined? How do the changing priorities affect existing programs?
• What's not changing?
  Are some priorities declining in importance but holding strong in the budget because of momentum or influence?
• Who's watching?
  Stay in touch with watchdog groups that monitor the agency you cover. Listen to their criticisms but be aware of their agendas.
• Budgets reflect power.
  Look for evidence of kingdom-building in the budget. Can you illustrate a character's growing (or declining) power and influence through the budget? Who holds the power? How do their favorite projects fare? How big a share of discretionary spending goes to their districts? Who gives to their campaigns? How do the big contributors benefit from the character's power?
• Find the deals.
  Look for the "pork" that found its way into the budget as a result of backroom deals: legislators supporting each other's pet projects. Especially scrutinize the last-minute additions to a budget or legislative package. Spending that sneaks through without public debate and scrutiny from committee hearings usually deserves journalistic scrutiny.
• Get work papers.
  Getter "once found a treasure trove" in work papers the governor used to guide a veto. "It included the names of politicians who were getting favors from budget line items."
• Watch the economic context.
  Right now the economic context is everyone cutting budgets in the slumping economy. But watch for windfalls and how they are spent. Windfalls or surprise shortages come not just from a rebounding economy, but from a variety of other factors: property reassessments, annexations, changes in formulas that share state or federal money with local governments and schools, enrollment increases that bring in more state or federal money, legal settlements such as the tobacco lawsuits, changes in federal tax laws when state taxes are tied to the federal tax code, decreases in the welfare rolls. When the economy rebounds, watch to see whether agencies increase spending prudently and build up rainy-day funds, or whether they spend themselves right into the same fix they were in when this recession hit.
• Don't be fooled.
  Officials sometimes start with a cost-of-living increase as a baseline. Then they will talk about "cutting" the budget, when really they are planning a smaller increase.
• Check promises against reality.
  Candidates' promises sometimes fall short when winners face the reality of the budget. Check to see whether the office holder is able to deliver on the promises and if so, what other services are cut to make room.
• Watch for waste.
  Check for policies or loosely managed funds that encourage waste. For instance, does your agency practice "use-it-or-lose-it" budgeting, where officials concoct wasteful ways of spending money because if they don't spend the money this month or this year, they lose it from the budget next year. This not only encourages waste this year, it locks in opportunities to waste again in future years. John Rains points out that agencies "find ways to avoid having leftover money in their budgets. Hint: check for unusual or questionable spending in the last quarter of the budget year."
• Identify discretionary spending.
  Most councils and legislatures actually have little control over much of the spending in their budgets. The spending is dictated not by this year's votes but by federal mandates, entitlements and labor contracts. Federal or state money may come with requirements of local matches. Learn how much discretion the agency you cover really has and how much it is spending other agencies' money and following other agencies' rules.
• Check on peers.
  Identify school districts, cities or states of similar size and situations and see how they are handling the same challenges your agency is facing.
• Avoid habitual coverage.
  Discuss with your editors what budget stories you're covering and why. Are you covering certain developments because they're important to readers or because you've always covered them? If you want to cut back on budget coverage, don't just complain about the assignment. Develop ideas for stories that will serve the reader better and propose spending your time on them instead. Or develop some story ideas that would better explain why the budget is important to readers, focusing more on impact and less on process.
• See the little picture.
  Sometimes the best stories are not how much spending is up or down or how much taxes increase. Sometimes the best stories are in the minutiae of budgets or spending reports: parking fines, delinquent taxes, library fines, deadbeats, phone bills, inventories of missing property, road repairs by neighborhood, salaries, overtime. (Stephanie Reitz of the Hartford Courant gives this note of caution on pay figures: "Ask for the year-end numbers provided to the IRS, not the standard scale for the positions. That year-end information includes overtime and other incentives that can boost earnings significantly. Example: Firefighters in one Connecticut city often doubled their annual earnings with outrageous overtime. That OT was available because the city was in a lengthy hiring freeze and many jobs were open. But the city spent so much in OT - and had such exhausted firefighters - that it should have just filled the jobs in the first place."
• Know the policies.
  Read the laws, ordinances or policies regarding budgets and spending for the agencies you cover. Is the board giving the public enough chances to comment? Does the agency audit as required? Does the board follow policies relating to bidding and conflicts of interests?
• Learn the jargon.
  Ask stupid questions until you understand all the terminology that officials use as they discuss the budget, audits and financial reports. Visit some journalism Web sites and brush up on mathematical terms and concepts such as average, mean, median, percentage points and the like.
• Find a "guide."
  See who comes to budget hearings. Talk to them. Learn their expertise and their biases. See if you can find someone who's not part of the agency who understands its workings and can become a regular source, steering you toward areas of interest and importance. Beware of the guide's biases, but use her expertise.

Studying spending

• Study audits.
  Auditors who understand budgets and financial reports better than you do analyze them and publish reports telling where organizations are making mistakes. Be sure to study audits and ask the auditors to explain them if you don't understand.
• Read the notes.
  Financial statements aren't like newspaper stories, with the important news stated at the top. Sometimes the lede is buried in the footnotes. Again from Getter: "Notes to the City of Miami's 1995 statements, for instance, included a section called 'Deficiency of Revenues and Other Sources.' In other words, the city was going broke."
• Talk to the people behind the numbers.
  As Getter says, "Source the budget of financial statements like you would any other story. Find former employees, former auditors, former budget experts. Talk to the people now working there.
• Watch for incentives.
  Does your agency reward workers for suggestions that save money? Does it adopt some suggestions but screw the workers out of their rewards on technicalities?
• Find outside experts.
  Getter advises looking into the bond rating of the government units you cover. "Talk to the experts from Standard and Poor's and Moody's who monitor your city or agency's finances. What do they think? What documents can they give you?"
• Examine privatization.
  Consider whether the private sector might be able to handle some of the functions of the agency you are covering. Check to see if similar agencies elsewhere have shifted those jobs to the private sector. Does the private enterprise save money? Does it deliver quality service? If your agency is considering privatization, examine the issues: Who's going to get the work and what political connections do they have? Will the private business provide the same service as the public agency did? Does it save taxpayers money by working more efficiently than government or does it diminish services by cutting corners? Does it meet the same environmental and safety standards? Does it shift jobs from union workers to non-union? Does the move really save taxpayers money, or do the taxpayers now have to pay the private entity for the service and still pay as much in taxes?
• Check expense reports.
  Check travel and entertainment expenses of the top executives of the agencies you cover. Do they charge the taxpayers for spouses' expenses? Do they charge the taxpayers for alcohol (and does policy allow reimbursement for alcohol)? How necessary are their taxpayer-financed trips? Do they make trips of dubious value to locations where their children live? Does an executive with a commuter marriage find lots of "business" to do in the city where the spouse works? Do they fly first-class, stay in expensive hotels or buy expensive meals? Do two executives turn in receipts for both of them for the same meal? If a national conference met in Louisville one year and Honolulu the next, did council members or legislators who didn't bother to make the Louisville trip suddenly decide the Honolulu trip was in the taxpayers' interest? How much did they spend on the trip?
• Check major expenditures.
  How are the major contracts awarded? Is the bidding process competitive? What are the connections of the winners and losers? How much did they contribute to campaigns of the officials making the decisions? Do any of the officials have direct interests in any of the enterprises that do business with their agency? If so, do they abstain from voting and discussing?
• Watch for cost overruns.
  Check the spending reports for a major project. Did the contractor deliver as required by the bid? Did the agency allow some extra expenses that it didn't have to? Did the contractor have to cut some things from the project?
• Watch for special requirements.
  Does the agency or its contractors follow requirements about wages, minority subcontractors, etc.? Are the minority or women subcontractors really the subcontractors or are they shell companies?
  
  Check administrative costs.
  Jay Wagner of the Des Moines Business Record looked at the spending of a public hospital that had lost $2 million each of the last two years. "They've cut some popular, vital programs to the poor. I used an Excel data base to download expenditures from the last three years and then sorted expenses by category to show that Broadlawns' administrative costs amount to about one out of every three dollars spent at the institution. That's nearly double other public hospitals around the
  country. (I used Guidestar to pull 990s off the web for my comparison.) Using Excel offers lots of other opportunities for stories and analysis:
  1.) What local businesses get the most dollars from the hospital?
  2.) What hospital employees spend the most money on travel?
  3.) How have certain expenses grown in recent years?"
• Check bills that the board approves.
  "For any board, it's one of their most important tasks. They oversee millions of dollars in tax money and too often we focus on only the big-picture items," Wagner says. He recounts a story from his days at a small-town newspaper: "I was reading the legals one day and noticed that a credit card bill was paid by the local community college (a state-owned, trustee run institution). I was curious about it so I looked through a year's worth of newspapers and saw that the Amex bill was paid monthly. I asked the treasurer for copies of the credit card statements and found that the president of the school was using his card to pay for lots of questionable expenditures (his daughter's wedding dress, for one.) At the same time, the president was arrested twice in three days for drunken driving and that gave me a launching pad to also report at the same time that he had charged hundreds of dollars to the credit card at area taverns. And he occasionally used the card to pay for hotel bills within 30 miles of town. Too drunk to drive. I've since learned that where there is smoke there is fire. It soon became apparent that the college's overall finances were a mess, not because of misconduct but because of poor management by an absentee president."
• Check pension plans.
  Especially with the stock market's decline and/or with the retirement of Baby Bommers, some public pension funds may run short of money. Ronald Campbell of the Orange County Register advises: "If a defined-benefit plan's investments go sour, the employer must contribute more money to fully fund retirement benefits." Retirement funds "bear watching because they control gobs of money with little oversight. And when the stock market tanks, they may hand your local government a whopping bill for underfunded pensions.
• Watch for trouble signs.
  Is the agency drawing on its reserve funds? Is it using one-time cash sources to pay for routine expenses? Campbell notes: "When an agency issues a bond, it hires a trustee (usually a big bank) to make regular payments to the bondholders. It also posts a sizeable reserve fund, typically equal to two years' payment on the bonds. One of the first signs that bond is in trouble is when a trustee dips into the reserve to make payments."

Telling the story

• Consider graphics.
  Sometimes you can tell financial facts better with graphics than in prose. Work with your art department to decide the best way to tell the story.
• Consider people.
  Don't tell the reader about the budget in millions or billions. Tell them in terms that are easier to understand and more relevant. How much are property taxes going up on an average home? How much is the school district spending per person? How much more or less than inflation are public workers' salaries increasing? Maybe when the budget passes, you write a story telling how it's going to affect the average person, in street repairs, library hours, tax bills and the like. Or maybe you find a real family and analyze the budget's impact on them.
• Find different approaches.
  While incremental stories about each step of the budget process may be boring, whether necessary or not, a story about the whole process might be interesting. How did a particular official get a pet project through? Maybe she was shot down the first couple times she tried, but traded votes until she got enough support. Or maybe she was able to sneak it into a complex last-minute amendment featuring another provision that everyone else supported. Consider other ways you can tell the story in creative ways.
• Tell it simply.
  Rains advises: "Avoid jargon-or translate it." You need to understand terms like capital improvements, revenue enhancement, entitlement, shortfall and
  baseline budgeting but you need to explain the budget in terms your readers will understand.
• Remember story elements.
  Budgets may seem boring, but conflicts are not and budgets always generate conflicts. Set up a budget story in classic story terms: conflict-resolution, with characters, plot and climax. Setting might not be such a strong element in government chambers, but don't overlook it. Maybe the setting is the context of surrounding events, such as war, recession or drought.

Other resources

• Dave Herzog's "Twenty tips for covering and writing about budgets": http://www.projo.com/words/tip408.htm
• Dave Herzog's "Writing Better Budget Stories": http://www.projo.com/words/tip415.htm
  
• Melvin Mencher's "Budget Story Checklist": http://www.journalism.org/resources/tools/reporting/beats/budgets.asp?from=print
  
• Bill Dedman's "Power Reporting" (find your beat and check out the "governtment info" links): http://www.powerreporting.com
  
• Robert Niles' "Statistics Every Writer Should Know": http://www.robertniles.com/stats/
  
• George Landau's percent-change calculator: http://www.newsengin.com (click on "free tools")
  
• Guidestar's "Donor's guide to the charitable universe": http://www.guidestar.org/index.html
  
• "The Spreadsheet Page": http://www.j-walk.com/ss/index.html
  
• Census Bureau information on state and local government finances, school spending, etc.: http://www.census.gov/econ/www/go0200.html
  
• National Institute for Computer-Assisted Reporting: http://www.nicar.org